Source: Finance Association
① How was Tencent Holdings' revenue performance for various games in the first quarter? ② What are Tencent's advertising and video account business expectations for the first quarter?
$TENCENT (00700.HK)$The financial report for the first quarter of 2024 will be released on May 14. In response, some agencies pointed out that Tencent's game and video account business showed a positive growth trend in the first quarter of 2024. In particular, the game business is expected to see a maximum increase of 17% in revenue.
According to brokerage research reports from Guohai Securities and BOC International, they both pointed out that Tencent's gaming business will pick up in the first quarter of this year. Take Guohai Securities's research report as an example. The brokerage firm expects Tencent's game revenue for the first quarter of 2024 to be 48 billion yuan, down 1% year on year and up 17% month on month.
According to Dataeye data, “League of Legends Mobile Game” and “Battle of the Golden Shovel” performed well. Revenue and DAU both achieved double-digit growth in January and February, while revenue for “Break Through the Dark Zone” increased 34% and 213% year-on-year, respectively.
Guohai Securities pointed out that since the first quarter of 2024, new tours such as “Baijing Corridor” and “Two Kingdoms: Interlaced Worlds” have been launched by Tencent. The two-dimensional game “Baijing Corridor” is quite innovative in terms of content and gameplay, forming a unique set of “3D real-time multi-dimensional combat gameplay”. According to Gamelook, the total platform turnover for January is estimated at 100 million yuan. “Ni no Kuni: Interlaced World” received reviews from players for “exquisite painting style, beautiful music, and fully automated gameplay” after launch, and has certain potential.
Foreign Overseas Securities also pointed out that “Wang Zhe Rongyao” has been at the top of the domestic game best-selling list for a long time, ranking first in the global mobile game revenue list in March 2024; since 2024Q1, Tencent will fully launch the “Wang Zhe Rongyao” Douyin live broadcast, which is of great significance for user activity and retention.
Regarding the game business, Bank of Commerce International also pointed out similar views. The brokerage firm pointed out in the research report that Tencent's domestic mobile game sales are expected to increase 11% year-on-year to 3 billion yuan in the first quarter. According to data from Sensor Tower, Qimai Data, and Dot Data, in the first quarter of 2024, Tencent's local sales increased 11% year-on-year to 3 billion yuan (RMB, same below). Among them, the old game “Golden Shovel” contributed 1.3 billion yuan in revenue growth. Overseas turnover increased 1.6 billion yuan/ 25% year over year, mainly driven by Supercell games such as “Wild Brawl”.
Agencies expect Tencent's Q1 ad revenue to grow 20%
Guohai Securities and BOC International both have positive expectations for Tencent's advertising revenue for the first quarter of 2024. Guohai Securities predicts that due to the positive impact of internal circulation e-commerce, the advertising business will grow significantly. It is expected to increase 18% year over year, and believes that video channel advertising is a key factor driving revenue growth. At the same time, the gross margin of the advertising business is expected to increase.
Guohai Securities pointed out that in the field of video channels, Tencent is working to improve the user experience and accelerate the growth of live video e-commerce. According to data provided by the new list, as of March 2024, the number of works recommended and retweeted more than 100,000 times on the video platform reached 1005. In the field of live streaming, statistics from XinTV data show that in March, the highest number of live viewers on a single video channel exceeded 50 million, and the number of live viewers on 5 video channels exceeded 10 million. Of these, 2 of the top 5 were lifestyle content.
Meanwhile, BOC International believes that there is still room for growth in the advertising inventory of Tencent Video accounts. Thanks to the extension of user viewing time and technological progress, in particular the optimization of content recommendations and ad conversion rates, advertising revenue is expected to increase 20% year over year.
editor/tolk